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How Do Insurance Companies Determine Pain & Suffering Damages?

If you’re injured in an accident caused by someone else, you may be able to file a lawsuit and seek compensation from them for your losses. Losses come in a variety of different forms, from medical bills to property damage to pain and suffering. However, pain and suffering is different from other typical damages in that there is no way to easily calculate a financial value for this loss. Whereas medical bills and other damages usually have a value that can be determined by adding these expenses together, pain and suffering doesn’t come with an invoice to make it quick and easy to add to a lawsuit. So how are they calculated? Our latest blog takes a look at how pain and suffering damages are determined.

What are “Pain and Suffering?”

Pain and suffering is the term used to describe some of the effects of an injury that aren’t necessarily related to financial damages. Pain caused by an injury can lead to mental anguish, fear, loss of interest in things, insomnia, worry, and much more. The definition for pain is expansive, and includes far more than just physical pain—it also includes mental anguish. Pain and suffering are a type of damage that can be recovered in nearly every personal injury case, but there is no defined rule for how to calculate how much is a proper amount.

The Multiplier Method

The first method that some companies use involves taking a plaintiff’s quantifiable damages (medical bills, lost wages, etc.) and multiplying it by a number that represents the severity of the injury (usually somewhere between one and five). The number that emerges is an appropriate amount for pain and suffering.

For example, say you were injured and sustained $10,000 in medical bills and other damages. Your insurance company assigns you a severity multiplier of two. This means your settlement would be $10,000 in quantifiable damages, plus $20,000 in pain and suffering for a total of $30,000.

The “Per-Diem” Method

Depending on your case, this is often the more popular method for plaintiffs’ attorneys to use. This involves the plaintiff receiving a certain amount of money per day until they fully recover from their injury. Say you are given $100 per day for your pain and suffering and take a full year to recover; a 365 day year at $100 per day would mean you would receive $36,500 in pain and suffering. Your actual number will vary, so it’s best to talk to your attorney before using this method.

Have you bene injured in an accident? Get help fighting for your rights from a Midland personal injury attorney! Discuss your case with Dean Law Firm by calling (432) 214-8125 today!
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